Can I extend my term life insurance policy?
Posted on Tue, Nov 23, 2010
This is a commonly asked question. Term policies generally extend at the end of the term but the fixed premium is gone and becomes a variable premium. The premium rate increases dramatically to the point where it does not make sense for anyone other than someone who is terminally ill to pay it. Take a look at this example based on a male preferred non-smoker, age 34 for a 30 year term policy with a $1,000,000 death benefit.
Years 1-30 $117 Monthly Premium
Year 31 $3,236 Monthly Premium
As you can see, the premium jumps 2,666% in year 31 with annual increases to follow.
When considering term life insurance policies, we can show you the premiums for the various term lengths (10, 20 or 30 years). Unless there is a budgetary concern or a specific need for a short term policy, we would typically advise clients to purchase the longest term possible. Often times, it’s less expensive in the long run to go with a longer term policy.